Image by Richard Flook
Shanghai is famous for many things. It has the largest
population of any city in China, the tallest buildings, the
most art deco buildings in one space east of Manhattan and it
, where the concept of sweet and s
our Chinese food was born.
But for a snatch of time last week it became famous for the
place where the industrial minerals world convened to talk
about China and its future as an industrial minerals hub,
during the IM Chinas
Industrial Minerals & Markets Roundtable.
The last year, as all know, has not been an easy one for
industrial minerals markets. Steel, iron and (therefore)
construction markets are recovering, but slowly. Manufacturing
has hit a low. China
even China is in a slump, with predicted glints
of recovery amounting to disappointing figures time
However, there does seem to be some recovery in sight,
according to An Lili, Deputy Director of Industrial Product 2nd
Office, Trade Dept., Ministry of Commerce (MOFCOM),
The end of last year to July has seen a slow down,
Lili said. But July and August saw better-than-expected
During a presentation on the first day of the China IM Roundtable,
Lili said that some economic indicators had promoted
namely a month-on-month increase in the
Purchasing Managers Index (PMI) and an uptick in
Ken Su, China mining and metals leader, PricewaterhouseCoopers
(PwC), China, agreed that there was some optimism, telling
delegates that PwC believed
while lower than the last decade, overall demand growth
from China is expected to remain strong.
Growth in energy use will drive industrial minerals
growth, he added. China is trying to become a
leader in green technologies
While all were in agreement that China would remain an
if not the most
important market for industrial minerals, most also
added that practices would have to be changed if the industry
is to continue to compete with Europe, or to be self
Zhang Zhan, chairman of Chinas Non-metallic Industry
Association, outlined to delegates that change needed to take
place within the industrial minerals industry because
demand for industrial minerals is expected to grow by 10%
by 2020 this is the most basic estimate, he
There are a lot of details but everything should be
centred around energy saving and better valuation of our
resources, Zhan explained.
This is outlined in China
s drive to develop seven key industries: new energy; new
energy automotive; new materials; energy saving and
environmental protection; biological science; new information
industry and high-end equipment manufacturing.
Furthermore, as Zhan put it to delegates, while GDP is expected
to grow it is the quality of the GDP growth that
Chinas economy is quite stable but there are still
some fundamental issues that need to be resolved, he
said. The new government says it will be the quality of
GDP growth that will be more important, he
Richard Flook, managing director of Shinagawa Refractories Pty
Ltd, agreed that change needed to take place in China, adding
that the country has so far been able to exploit its vast
mineral reserves for a low cost but at a high cost to the
environment. Inefficient mining, high energy costs and a
weak market led to an unsustainable
situation he said.
| Ken Su addresses the
Flook touched on the subject of shale gas in China:
Sources for cheap energy are going to become increasingly
important, he said, adding that the exploitation of
Chinas vast shale reserves will take place in the near
Theres a lot of cheap gas that could come into
play, Flook added.
Mineral by mineral
Edward Barlow, country manager for TZMI, meanwhile discussed
how the zircon
market will change in China. At the moment, Barlow said, China
relies on imports (80% is imported, mainly from Australia) for
use in its ceramics industry.
The market is now very weak, Barlow said, after high prices of
zircon in 2012 drove zirconium and ceramics producers to run
Consumers had enough. They stopped buying and ran down
inventories, Barlow explained.
Looking ahead, Barlow said that strength in the housing and
consumer markets will drive Chinese growth.
Christopher Zhao, assistant director to the Liaoning
Special Resource Protection Office, China, said that the
industry will work to eradicate smuggling and modernise
We need to protect the materials in regard to energy
saving, he said. We want to promote a high quality
product and promote the development of a high-quality magnesia
construct that will support a world base, he
For graphite, IM
Datas Albert Li explained that the country was
moving to consolidate the industry, adding that this will
happen region by region as there are different levels of
| Albert Li explains the Chinese graphite
Relationships with the west have become more important for
companies, Li added: In the past governments have turned
a blind eye to poor practice, but now people are looking at Guangxi as key to
doing business in China, Li said.
Talc markets meanwhile were being hampered by government
involvement, explained Jia Xiu Zhuang, Haichen MinChem Co.
China is facing the most difficult and worst time [in
talc] even worse than 2009, he
Jia said that the governments failure to remove the talc
export tax as well as other hidden charges meant
that exports were falling off.
The price of high quality talc will remain strong, he said, but
middle to low grades will be soft.
This was referred to several times over the course of the China
event, with many speakers underlining that they were not sure
why the quotas were waived for all other minerals, aside from
magnesia and talc.
It is imperative to reduce or avoid man-made
intervention, Jia said.
Investing in China
There is still room for investors in China, but more
consideration has to be given to life after the deal, Su
The most common mistake for a deal falling apart is that
people dont look at life after the deal, he
must always consider a post-deal world.
Chinas landscape was changing, PwCs Su added, as
lifestyles change. A shift in calorie intake for example, and
the consumption of more meat, meant that there is more pressure
on the food chain and more need to import agriminerals like
potash and phosphate.
As people change then, so do markets. Africa could be a
potential for Chinese investors, for example (as was argued by
Chris Potgieter, director, BFluor Chemicals Pty (Ltd)), and the
emergence of shale gas as an energy source means that there is
also a market for oilfield minerals and ceramic